GBP/USD: Downside opening up below 1.3000 ahead of US CPI?

GBP/USD attempted a minor bounce from weekly lows of 1.3024 in the Asian trades this Monday, as the USD bulls took a breather after Friday’s solid reversal triggered by stellar US jobs report.

GBP/USD: Focus on UK manufacturing production and US CPI

The spot managed to regain the bids so far this session, and now looks to take on the recovery towards 1.3100 levels, as the US dollar is on the back foot against its main competitors, correcting a part of NFP-inspired extensive rally.

The US labour market report came in upbeat across all indicators, which offered renewed optimism to the markets over the US economic prospects and rekindled hopes for a December Fed rate hike. Hence, the USD bulls gained momentum and prompted broad based US dollar rebound from near multi-month troughs, driving the USD index back above 93 handle.

The latest leg higher in Cable can be also attributed to resurgent demand for risk currencies such as the GBP, as the Asian markets also cheer upbeat US jobs data, tracking their Wall Street counterparts higher.

However, it remains to be seen if the GBP/USD pair can sustain the recovery mode and manage to keep 1.30 handle in the week ahead, as renewed geopolitical tensions over North Korea coupled with expectations of a better US CPI report could very well keep the bulls at bay.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet noted: “The key is the 1.3000 threshold as a break below it will likely dent further investors' sentiment. In the 4 hours chart, the 20 SMA turned sharply lower above the current level, while technical indicators ended the week flat in oversold territory, with no signs of changing course. The 200 EMA in this last time frame stands around 1.3000, reinforcing the psychological support level. Support levels: 1.3000 1.2965 1.2920 Resistance levels: 1.3070 1.3110 1.3150.”